Italy to seek new EU deal

ITALY is to seek a new deal with the Euro­pean Union to al­low it to kick­start its stalling econ­omy with an ex­pan­sion­ary 2017 bud­get.

Eco­nomic De­vel­op­ment Min­is­ter Carlo Cal­enda’s com­ments came three months af­ter Rome was granted “un­prece­dented” lee­way over its 2016 bud­get and warned by the Euro­pean Com­mis­sion that it should be tight­en­ing fis­cal pol­icy next year.

Mr Cal­enda spoke out af­ter lat­est data showed the Ital­ian econ­omy failed to grow be­tween the first and sec­ond quar­ters of this year, sug­gest­ing a slug­gish re­cov­ery which be­gan last year has stalled.

An­a­lyst s say the govern­ment will now have to re­vise down­wards its fore­casts of growth of 1.2 per­cent for this year and 1.4pc in 2017, with knock-on ef­fects on its deficit re­duc­tion plans.

The Com­mis­sion has set Italy a deficit tar­get of 1.8pc for 2017, ar­gu­ing that kind of ad­just­ment is nec­es­sary to reverse the up­ward trend in the coun­try’s huge debt. –